Best benefits are reserved for the motorists

Anything that encourages motoring can hardly be considered a green option, but according to research by Personnel Today’s sister publication, Employment Review, free car parking is the most popular employee benefit on offer today.

The survey of 222 organisations, which together have more than 570,000 employees, found that 83% of employers currently offer free car parking to some or all of their staff. And unlike many employee benefits, this is one perk that is not taxed.

Excluding employee allowances, such as mileage and subsistence payments – which are primarily designed to compensate employees for expense incurred in doing their job – the 10 most widely offered benefits are strongly focused on cars and health.

The survey found that the second most common benefit was paid time off for medical and dental appointments (82%), followed by the provision of counselling or employee assistance programmes (64%) and long-service awards (64%).

A substantial minority of employers also footed the bill for at least some of their employees to have permanent health insurance (40%) and childcare vouchers (39%).

Some way down the league table, the least common employee benefit identified was the offer of an interest-free loan to pay congestion charges (4%).

But parents are catching up as employers review benefits plans.

One in three organisations (36%) surveyed by Employment Review said it had made changes to its benefits and allowances package over the past year. A further four in 10 (39%) said they would be doing so in the year ahead.

The most common change to benefits packages over the past 12 months was the introduction of childcare vouchers (8%). This was also the case in Employment Review’s 2006 survey, reflecting the appeal of the current tax-efficient childcare voucher scheme to employers and employees.

The second most widespread change involved increases to annual leave – as employers took action ahead of the rise in statutory minimum paid leave arrangements due to take effect in October 2007 and October 2008.

Small numbers of employers had also reviewed their car allowances (3%) or introduced salary sacrifice schemes, which allow employees to ‘buy’ benefits such as additional holiday (2%).

Looking ahead, the most widely anticipated changes to benefits in 2007-08 will be the introduction of flexible benefits (8%) and childcare vouchers (6%). Both the introduction of flexible benefits and longer holidays are predicted by 4% of respondents.

Although few employers have firm plans to introduce cycle-to-work schemes, this is expected to be a growing area for employee benefits over the next few years.

…while company cars head for the scrapheap

Changes to the tax regime have led to a substantial drop in the number of employers operating company car schemes, the Employment Review research shows.

Just over half (55%) of employers now offer company cars, compared with two-thirds (64%) a year ago, and more than eight out of 10 (82%) before changes to the tax regime in April 2002, which switched taxes from mileage to exhaust emissions.

According to the Employment Review survey, average mileage rates for company cars now stand at 15.8p per mile, compared with an average of 39p for personal cars used for business trips.